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Federal Regulations Threaten Reliable Electricity - Part 2

June 15, 2011

By Jay Holmquist | As I mentioned in my earlier post titled, “Federal Regulations Threaten Reliable Electricity” there are several recent studies which highlight the negative impact federal regulations will have on reliable affordable energy.

One study notes that if it was unlikely there would be a price on carbon or climate regulations in the future, perhaps a small number of the coal plants slated for retirement by 2020 would keep operating.

However, this ICF International study suggests that efforts to eliminate EPA’s climate regulations will make little difference for the future of many coal plants. Legislation blocking the EPA climate regulations just extends the period of uncertainty and coal plant owners will still factor uncertainty about greenhouse gases into their decisions.

As coal plant owners run the numbers on costs to comply with new environmental regulations geared toward reining in non-greenhouse gas pollutants, in many cases, the owners or their bankers will decide the costs aren’t worth it.

Based on the ICF International’s calculations, they predict coal will account for less than one-third of power generation, down from 47% in 2010.

In his State of the Union speech President Obama proposed a national Clean Energy Standard (CES) of 80% by 2035. The President included nuclear power, natural gas, and clean coal in his vision of a CES to generate support from Republicans and Democrats from states with coal, heavy manufacturing, and coal dependent utilities.

However, an analysis by the U.S. Chamber of Commerce says the use of coal for electric generation could decline by 78% by 2035 if Congress adopts the Obama administration’s goal.

Consumers need to ask: Where will reliable supplies of electricity come from in the future if the role of coal declines as predicted?